AUSTIN, Texas — Property owners affected by floods often must elevate or relocate their buildings to reduce their future flood risk and meet local requirements for building or rebuilding in a floodplain. In cases of extreme damage, they may demolish buildings rather than rebuild to the local standard.
To assist with the cost of complying with local requirements, Increased Cost of Compliance (ICC) coverage provides up to $30,000 for eligible structures, in addition to the normal payout from a flood insurance policy. ICC is included in most standard flood insurance policies available under the National Flood Insurance Program (NFIP).
Additionally, homeowners, business owners and nonprofit organizations that have an approved disaster loan from the U.S. Small Business Administration may request a loan increase to cover the cost of relocation, mitigation measures and meeting building code requirements. For information, contact an SBA case manager at 800-659-2955.
Is Your Home Eligible?
A building is eligible for ICC if it is declared substantially damaged.
- Substantial damage: The cost of repairs will equal at least 50 percent of the pre-flood value of the building.
- This determination is made by the local government, generally a building official or floodplain manager.
Three Types of Work for Residential Structures
ICC most often helps pay to elevate a building, but it also can be used to relocate or demolish one.
- Elevation projects raise a home above the base flood elevation.
- Floodwaters have an estimated 1 percent chance of reaching the base flood elevation in any given year.
- Relocation projects move a building to a less flood-prone spot within the current lot or on a different lot.
- Demolition is used when severe damage makes the other three techniques unwarranted or not worth the investment.
- The property may be redeveloped after demolition.
Filing a Claim
Your ICC claim will be filed separately from your normal flood insurance claim.
- You must submit a substantial damage determination letter from your community building department as well as a building permit, a copy of a signed contractor estimate for the work and a signed ICC Proof of Loss form.
- Contact your insurance agent to initiate a claim.
- The combination of your ICC payment and your normal payout cannot exceed the maximum coverage available through NFIP:
- $250,000 for a one- to four-family residential structure (not including the structure’s contents)
- $500,000 for a residential building with five or more units
- $500,000 for a non-residential building
- Do not begin repair work until the ICC claim is filed.
Maximize the Value
Your community may be able to use your ICC payout as matching funds for federal or state grants.
- Policyholders can assign their ICC benefits to their community. The community can then file a single claim for a community mitigation project.
- FEMA will count the ICC money as non-federal matching funds for mitigation grants.
- The community is required to dedicate mitigation funds to any property whose ICC payment is counted toward the matching funds.
For more information, contact your insurance agent or the NFIP Help Center at 800-427-4661, or email FloodSmart@dhs.gov. Information is also available at www.FEMA.gov, www.FloodSmart.gov and www.fema.gov/Texas-disaster-mitigation.
Texans can go to www.facebook.com/FEMAHarvey/, https://twitter.com/femaregion6, and www.fema.gov/disaster/4332 this week and throughout May to learn how NFIP can protect them from disaster. Texas NFIP 2018 is a whole month dedicated to sharing tips with Texans about how they can prepare themselves and their homes for hurricane season. Use #TXNFIP18 to find information online and share with your friends and family.
For additional information on Hurricane Harvey and Texas recovery, visit the Texas Division of Emergency Management website at https://www.dps.texas.gov/dem/.